BHP plans to export Eagle Ford processed condensate

WASHINGTON - BHP Billiton is preparing to export a processed ultralight oil overseas without the government's explicit authorization - a move likely to be mimicked by other energy companies eager to sell crude to foreign buyers.

BHP said it was moving ahead with exports of processed condensate only after scrutinizing applicable laws, including the United States' long-standing ban on selling raw crude overseas.

In an emailed statement, the company said it looks for ways to get the most out of its sales options while following "all applicable laws and regulations." In this case, it said it plans to export condensate from the Eagle Ford Shale in Texas that has been processed after being run through distillation towers.

It declined to provide details on its specific sales plans.

The move mirrors sales by Pioneer Natural Resources and Enterprise Products Partners, which began exporting ultra-light Eagle Ford condensate earlier this year. But there's one big difference: Unlike Pioneer and Enterprise, BHP Billiton did not wait for the Commerce Department's Bureau of Industry and Security to bless its plans. In its statement, BHP stressed that the processed condensate it plans to export is not a crude oil under U.S. trade regulations.

In rulings given to Enterprise and Pioneer earlier this year, the bureau said that condensate is not subject to a general ban on crude oil exports as long as it is distilled. That distillation treatment makes condensate more like a petroleum product - such as gasoline or diesel - which can be freely exported.

Because the bureau's orders aren't licenses to export in and of themselves - and instead are designed mainly to provide legal assurance - potential copycats don't need similar rulings of their own to begin selling processed condensate overseas.

Jacob Dweck, a trade lawyer with Sutherland, Asbill & Brennan, said he expects more companies to export processed condensate without first getting their own rulings, particularly amid a slowdown in the agency's vetting of new requests for those interpretations.

There is a limited U.S. market for condensate, which generally is a gas underground and is so light that domestic refiners have a limited capacity to process it.

But Asian buyers are interested in it as a replacement for naphtha, a petrochemical feedstock.

And so far, Pioneer has found enough buyers to export about 15,000 barrels per day of distilled condensate, with cargoes going to South Korea, Europe, Singapore and Japan. It expects to bump up exports to 70,000 barrels per day next year.